Question

True or False:If the price of a product goes up by 10% and the quantity demanded goes up by 20% the product is an inferior good.

Answer 1

False.

If the price of a product goes up by 10% and the quantity demanded goes up by 20% the product is a GIFFEN GOOD.

An inferior good is a good that decreases in demand if income increases. These are the goods that people opt not to buy when their purchasing power increases.